Rep. Connolly’s Real Estate Transfer Fee Receives Favorable Report

Representative Mike Connolly’s legislation to enable cities and towns to better fund affordable housing programs reached a significant milestone this week with a favorable report form the Legislature’s Joint Committee on Municipalities and Regional Government.

The legislation would make it possible for municipalities to implement a fee ranging from 0.5 percent to 2.0 percent on certain real estate transactions. All of the proceeds from the transfer fee would go to a municipality's Affordable Housing Trust Fund. Cities and towns choosing to implement the fee would also be empowered to exempt certain transactions as they deem appropriate. Possible exemptions could include transfers involving seniors or first-time home buyers, or transactions between family members.

"I am very pleased that our real estate transfer fee legislation is moving forward, and I am grateful to the Joint Committee on Municipalities and Chairman O'Day for the favorable report," Rep. Connolly stated.

"Over the past twenty years, we have been facing a perpetual emergency in the shortage of affordable housing, and while the overall economy and the local housing market have both changed dramatically during this time, our housing policies and programs have struggled to keep up with the pressure of the real estate boom. This legislation has the potential to put a powerful new tool into the hands of municipal officials who are working to protect affordability and expand affordable housing options in Cambridge, Somerville, and across the Commonwealth," Rep. Connolly added.

The legislation was originally introduced by Rep. Connolly in January 2017. Based on feedback from constituents, advocates, and stakeholders, Rep. Connolly worked with Attorney Ellen Shachter of Greater Boston Legal Services to introduce a revised version of the bill at a hearing before the Municipalities Committee in October. This revised version, H.4196, is now moving forward to the House Committee on Steering, Policy, and Scheduling with a recommendation that it "ought to pass."

“I am thrilled to learn that Mike Connolly’s transfer fee legislation was reported out favorably by the Joint Committee on Municipalities and Regional Government," said Attorney Ellen Shachter.

"This critical legislation gives cities and towns a new tool to raise desperately needed funds to support the development of affordable housing.  Given the current state of the housing crisis in Greater Boston and around the state, cities and towns need to be empowered to adopt local solutions as runaway housing costs threaten the stability of the Commonwealth’s most vulnerable residents,” Shachter continued.

The concept of a real estate transfer fee has been gaining momentum in recent months. In September, the Cambridge City Council adopted a policy order in support of Rep. Connolly's bill, and last month, Somerville Mayor Joe Curtatone used the occasion of his Inaugural Address to outline a ten-point housing plan that included a transfer fee. In addition, the towns of Nantucket and Provincetown are also calling for a transfer fee.

Rep. Connolly would like to thank local advocates who have expressed support for the transfer fee proposal, including members of A Better Cambridge, Cambridge Residents Alliance, Somerville Community Corporation, and the Chinese Progressive Association. Thank you as well to the bill's co-sponsors, including Cambridge and Somerville Reps. Christine Barber, Marjorie Decker, and Denise Provost and Senators Sal DiDominico and Pat Jehlen.

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